Growing online subscriptions in the desert

The family that owns the Albuquerque Journal values the content produced by its journalists. The journalists who report and write the stories that fill the news hole value their work. The paid subscribers to our newspaper value what we produce in Albuquerque New Mexico.

Almost two years ago, the Albuquerque Journal erected a toll-gate to the stories on its Web site — ABQjournal.com — to emphasize our belief in that value. In that time, more than 3,700 people have paid for access to the site and more than 25,000 print newspaper subscribers have signed up as a value-added benefit to their print subscription. Today, we have more than 1,500 people paying for online-only subscriptions.

Despite the tollgate, Internet page views have risen more than 30% in that time period while unique Internet traffic is now at the same level as before charging. Advertising revenue is up more than 50%.

And most importantly to our business model, print subscriptions have risen at a time when circulation has been stagnant at newspapers across the United States.

Our business model uses the Web site firstly as a print retention tool, secondly as an alternate method of content delivery for those outside of our daily print delivery zones like a mail-delivery subscription and thirdly as a testing ground for the future.

Our ownership did not want our site to become a money-pit as we saw many Web-only plays become. Each additional user we were gaining used resources — bandwidth and server — but we were not seeing a return on investment for each new user through additional advertising online.

Why do we charge? Why do we think we can charge?

It is simple: the boss said charge: we charge for our newspaper.

And it is complicated.

Our fans and critics like to point out: The New York Times doesn't charge. The Washington Post doesn't charge. The Denver Post doesn't charge.

"Our business model uses the Web site firstly as a print retention tool."

To understand our model, you must understand a little about us. First some facts about Albuquerque.

The Albuquerque Journal is a home-owned, independent daily morning newspaper with the largest circulation in New Mexico. The statewide newspaper circulates 120,000 papers daily and almost 150,000 on Sunday. Newspapers are trucked up to four hours each day in all directions.

It is located in the high desert at 5,314 feet (1,619 meters) alongside a 10,000-foot (3,048 meter) mountain. It is one of the oldest inland cities in the United States, founded in 1706. Albuquerque is home to about 550,000 people. The sun shines an average of 310 days a year.

It is the largest city for more than 400 kilometers. Denver is 700 kilometers north. Dallas 1,000 kilometers east. Juarez, Mexico, is south 400 kilometers. There's nothing to the west. Monument Valley, Grand Canyon, Death Valley, finally Los Angeles, more than 1,200 kilometers away.

The Albuquerque Journal is the largest media organization in the state with more than 150 journalists. The Santa Fe New Mexican has a newsroom with less than 50. The three statewide TV stations have even smaller news staffs.

New Mexico has a population of about 2 million people. The state capitol: Santa Fe, probably the best known place in the state, has less than 150,000 residents.

We're alone out here. In the desert, with coyotes howling and jackrabbits hopping and tumbleweeds blowing in the high desert winds.

And with reporters and photographers scattering out of our newsroom across the state, we've got exclusives on most every story coming out of this inordinately important news state:

"A newspaper, as a product, is like fresh fish. Old newspapers, old news is spoilage. Repackaged it has some value, but never as much as when it is fresh."

1. New Mexico is the birthplace of the Atomic bomb, which was detonated on July 16, 1945. The bomb was created in Los Alamos, atop a mesa, like an island in the sky about 90 miles (144 km) north of Albuquerque, that is reportedly home to more doctors of science per capita than most any other city. Los Alamos also has one the highest penetration rates of Albuquerque Journal and ABQjournal.com readers in our circulation area.
2. New Mexico's Gov. Bill Richardson, is the former Department of Energy Secretary, and U.S. ambassador to the U.N., appointed by President Bill Clinton. When the North Koreans wanted to open a dialog with the U.S., they came to Santa Fe.
3. New Mexico's former governor, Gary Johnson, advocated the decriminalization of marijuana, cocaine and heroin. He appeared in publications from the New York Times to Playboy. Johnson competed in the Ironman Triathlon. He recently scaled Mt. Everest.

So we have factors in our favor for successfully charging for content: newsworthiness and, many times, exclusivity. Shortly after starting to charge, we received this e-mail:

Our reporters sometimes take issue with our position: they want as many people as possible to experience their content. But some have come over to the idea that what they produce has value and they like receiving a paycheck.

In an e-mail, the editor of the newspaper, Kent Walz, responded to one critic of charging for the Web site.

It began:

What people will pay for:

When ABQjournal.com started charging, our inboxes overflowed with hate mail.

Some people just don't think they should have to pay for anything. These people feel a sense of entitlement. Others don't think our content is valuable enough to be forced to pay (I'll pay for the Wall Street Journal but not the Albuquerque Journal ilk). For others, it's not the cost, it's the technical pain of another login, another signup and the difficulty of remembering another username and password.

So what will people pay for now? And what of the words of our customers and former customers?

Here's a sampling of those e-mails:

This one I call WILL NOT, CAN NOT PAY

Here's another:

I include this one in because my 5-year-old son laughed when he heard it:

And finally some think the JOURNAL IS TOO PROUD:

Yes, we are proud of our content. But what is really the most valuable part of our content? What makes a newspaper a news paper?

Many proponents of charging for content on the Internet propose models where the day's news is free while archival content and special interest content is placed behind a paid curtain.

We believe that model fails on its premise.

News today is the most valuable product a newspaper has. How many people buy your newspaper for consumption — that is reading — the day it is produced?

On a Sunday morning, the Albuquerque Journal delivers some 110,000 newspapers. It sells another 40,000 papers via single copy sales from news boxes, kiosks and stores. That's about 150,000.

How many Sunday papers do we sell on Monday or Tuesday or Wednesday? Less than 150, our circulation department reports.

A newspaper, as a product, is like fresh fish. Old newspapers, old news is spoilage. Repackaged it has some value, but never as much as when it is fresh.

For our publisher and president's message on why we charge, see ABQjournal.com/why.htm — it is free to read.

We have tried to create the perception that our content is unique and has value. You'll see some content on our site remains free. The free content is not readily apparent as part of our goal of creating value for all our content.

What remains free includes the content on the home page and other index pages but not the stories. It also includes advertising and tourism information.

Local content is our franchise. It is what people come to our site to see, it is what we highlight and it is what is always in the paid area of our site.

How we charge

Charging is not easy. Technically, you must either build or buy a registration system. We opted to build our own — for reasons of cost and control. We use an opensource MYsql database, .htaccess files and perl scripts to control sign-ups and access.

Registration also is not easy on staff and customers.

It seems rather elementary, but first you must know who your customers are to provide access to the site for them.

Your circulation department only needs to know one thing to deliver a newspaper: the location where the paper should be delivered. They don't have to know where the bill is being sent. They don't have to know who is going to read the paper. They don't have to know the phone number of the person receiving the paper. They just need to know where.

The circulation department may tell you it knows the who, what, where and when, but for five to 10% the subscriber information data will be incorrect.

When the computer tries to match the two records, it will fail. A loyal customer will then be blocked from access.

So how do you deal with that?

In our case we chose self-registration with a trial period for anyone who registers. So, if you go to our Web site and claim to be a subscriber you will immediately gain access to our Web site.

Your subscription record will be checked and if it matches you will be added to the online records. If it doesn't match, the information will be sent to the circulation department, which will then try to manually match the records and use the information either for print retention or to try to sell you a subscription to the newspaper or the online edition.

Each morning the online subscription records are matched to the print subscription and any person that does not match is purged from the system.

An expected positive effect of this: Often times people call and say they meant to pay the newspaper bill and then put the check in the mail.

After all this talk about value, how can we justify this model that allows any person to easily register and cheat us out of our content?

The level of security is the same as a printed newspaper, where we deliver a paper to a doorstep. The next door neighbor could easily steal it. Or a person could put 50 cents in the newspaper box and walk away with the whole lot of papers. But if they cleared out a box day-after-day, we'd position a person to prevent the theft from happening.

Online we handle it in much the same manner. If a username seems to show up an inordinate number of times in our log files, it triggers an investigation and a certain username or IP address may be blocked from accessing the site.

Charging creates another dynamic. If people are paying they expect quality for their dollar. They expect the site to always be updated. They demand the site to be up.

On holidays, we used to be able to staff with fewer Web producers. If they would complain about an edition being sub-par on a holiday, we could say: "They're getting it for free."

We can't say that any more. Every person who calls is a potential customer, who must be listened to and treated with respect. Journalists in the newsroom see people who call as a source to be used for their needs — in the Web, being a newsroom and a circulation department we see callers as potential customers who must be served.

When someone can't find a story on the Web site, our Web producers take the time to help them locate it. When someone can't figure out how to log in to the site, our Web producers walk them through the steps.

The Web created another way for customers to communicate with our companies. Charging on the Web gives them more reasons to interact with us. On the Web they expect 24 by 7 by 365 interactive response.

ABQjournal.com receives communications from customers including people who:

The top issues with charging for access revolve around customer service.

Our Web room became a customer service center. Our journalists answer questions and route calls as needed, between responsibilities updating the news site:

We found we needed help dealing with this influx of customer service issues, so we turned to software tools to help us:

The print-retention model seems to have been effective for what we've tried to achieve in Albuquerque. Circulation was tumbling as Web site traffic soared in 2000 before we erected the tollgate.

Our publisher was hearing people say they were canceling subscriptions to the printed newspaper because they could get it for free on the Web Site.

Our Web traffic was going up. Our circulation was going down. But there's no proven correlation to the events, our circulation director says.

Other factors helped our circulation including:

Circulation has rebounded more than 3.5%, to levels nearly at May 2000 levels, since the Albuquerque Journal started charging for the Web site.

The circulation director says that charging for the Web site is one of many factors that has influenced the numbers, but it is an important value-add piece to aid sales and retention.

ABQjournal.com has had 3,782 customers pay for access to the site in the two years it has been charging. As of April 2003, 713 yearly subscribers were active and 785 rebill monthly subscribers are paying. These numbers continue to go up each month (100-150 new signups each month). The total yearly signups has been 1,092 for a retention rate of about 65%. Monthly signups have been 2,690 for a retention rate of about 56%.

It's time to declare the free content model has failed. Quality content is too expensive to produce and too valuable to its readers to give it away. In fact, the act of giving it away devalues it even more.

"We have tried to create the perception that our content is unique and has value… Local content is our franchise. It is what people come to our site to see, it is what we highlight and it is what is always in the paid area of our site."

Here, author Robert Spears argued in January that giving away content is akin to committing the Seven Deadly Sins:

"Since no authoritative international body has yet decreed that endemic free content can be detrimental to the soul of information economies, I have voluntarily preordained this long overdue public service message: Free Kills: Let's not leave it to chance any longer and take pre-emptive action before the next-generation of absurd free business models are born," Spears wrotes.

Perhaps this warning from Spears might help sites propagate the social acceptance of paid content:

"WARNING: Unrestrained free content and services have been known to kill businesses in unprotected markets. Second-hand effects of free offerings can also lead to strategic paralysis and slow, agonizing death. In accordance with building a sustainable information market, this site pledges to restrict the toxic release of free content and services into an overly contaminated environment. For more information, we encourage you to read "The Seven Deadly Sins of Free Content".